Why Most Freelance Contracts Are Terrible
I've reviewed hundreds of freelance contracts from people in my coaching program. Most are either bloated 15-page documents that clients refuse to sign, or vague one-pagers that leave you completely exposed when payment disputes happen.
Here's what I've learned after using contracts for everything from $2,000 freelance projects to $200,000+ agency deals: a good freelance contract needs exactly four sections that matter, and everything else is filler. Below, I'll show you a sample freelance contract structure that actually works, plus the specific language I use for each section.
The biggest issue I see is freelancers treating contracts like a legal dissertation instead of a business tool. Your contract exists for one purpose: to get paid for the work you agreed to do. If it's not serving that function, it's worthless regardless of how legally sophisticated it looks.
The Core Structure of a Working Freelance Contract
Every freelance contract I use follows this exact format:
- Parties and Date: Who's involved and when the agreement starts
- Scope of Work: What you're delivering, in specific terms
- Payment Terms: How much, when, and what happens if they don't pay
- Termination Clause: How either party can end the relationship
That's it. I used to include non-competes, arbitration clauses, and IP assignment language. None of it mattered. When a client relationship goes south, it comes down to scope and payment every single time.
I've had exactly three payment disputes in the last five years. All three were resolved by pointing to the scope section and payment terms. The 12 pages of boilerplate legal language I used to include never came into play once.
Sample Freelance Contract: Section by Section
Section 1: Parties and Effective Date
This is straightforward but needs to be precise. Here's the language I use:
This Freelance Services Agreement ("Agreement") is entered into as of [DATE] by and between [YOUR NAME/COMPANY], with a principal place of business at [YOUR ADDRESS] ("Contractor"), and [CLIENT NAME/COMPANY], with a principal place of business at [CLIENT ADDRESS] ("Client").
If you're operating as an LLC or incorporated entity, use your business name here. If you're a sole proprietor, use your personal name. This matters for liability purposes later.
One detail most freelancers miss: always include physical addresses, not just company names. I learned this the hard way when trying to send a demand letter to a client who had three different business entities. The physical address in the contract made it clear which entity was liable.
Section 2: Scope of Work
This is where most freelancers get destroyed. Vague scope equals endless revisions and scope creep. Here's how I write this section:
Contractor agrees to provide the following services to Client: [SPECIFIC DELIVERABLES]. Services include: [BULLET LIST OF EXACTLY WHAT YOU'RE DOING]. Services explicitly do NOT include: [LIST WHAT YOU'RE NOT DOING].
The "do NOT include" list is critical. For a web design project, I'll write: "Services do not include: website hosting, domain registration, ongoing maintenance after launch, content writing beyond provided wireframes, or integration with third-party tools not specified in the deliverables list."
This language has saved me from at least 20 arguments about "but I thought you were doing X." I also include specific file formats for deliverables. If you're delivering design work, specify whether it's source files, PDFs, or both. For development work, specify whether you're delivering documented code, a deployed application, or both.
Another thing I add: "Client will provide all necessary materials, access, and approvals within [NUMBER] days of request. Delays in client-provided materials extend delivery timeline by an equivalent number of days." This protects you from clients who ghost for three weeks then complain about missed deadlines.
Section 3: Payment Terms
I use milestone-based payment for everything. Here's my standard structure:
Client agrees to pay Contractor a total fee of $[AMOUNT] for the services described above. Payment shall be made as follows: [PAYMENT SCHEDULE]. Invoices are due within [NUMBER] days of receipt. Late payments will accrue interest at [RATE]% per month. If payment is more than [NUMBER] days late, Contractor reserves the right to pause all work until payment is received.
For new clients, I always do 50% upfront, 50% on delivery. For ongoing retainers, I require first and last month upfront. The late payment clause matters because without it, you have no leverage when clients drag their feet.
I also include: "Client is responsible for all bank fees, wire fees, and currency conversion costs associated with payment." Small detail, but it prevents clients from deducting PayPal fees from your invoice total.
For international clients, I specify the currency and exchange rate handling. I use: "All amounts are in USD. If Client pays in another currency, payment must equal the USD amount at the exchange rate on the invoice date, not the payment date." This saved me $400 on one project when the euro dropped between invoice and payment.
I also include my payment method: "Payment may be made via bank transfer, PayPal, or Stripe. Client will receive payment instructions with each invoice." This gives clients options while keeping everything documented.
Section 4: Termination
Both parties need an out. Here's mine:
Either party may terminate this Agreement with [NUMBER] days written notice. If Client terminates before completion, Client agrees to pay for all work completed to date, plus 25% of remaining contract value. If Contractor terminates, Contractor will refund any payments received for work not yet delivered.
That 25% kill fee protects you from clients who sign a contract, make you turn down other work, then bail after two weeks. It's reasonable enough that clients sign it, but meaningful enough to deter flaky behavior.
I learned this clause the hard way after a client terminated a $15,000 project after I'd completed $8,000 worth of work but had only been paid the $7,500 upfront. The kill fee on future work would have given me the full $8,000 I'd earned.
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Access Now →What About NDAs, IP Rights, and Other Legal Stuff?
I only add additional clauses when the client requests them or the project actually requires them. For example:
IP Assignment: If you're creating original creative work (design, copy, code), include: "Upon receipt of final payment, all intellectual property rights transfer to Client. Prior to final payment, Contractor retains all rights." This protects you if they don't pay.
Confidentiality: For clients with legitimate trade secrets, I'll add a basic NDA clause. But for most freelance work, this is unnecessary. Your web design client doesn't have confidential information worth protecting.
Liability Limitation: I include: "Contractor's total liability under this Agreement shall not exceed the total amount paid by Client." This caps your downside if something goes wrong.
Here's what I never include anymore: non-compete clauses (unenforceable for freelancers in most states), arbitration requirements (too expensive for small disputes), or "work for hire" language (it's redundant with IP assignment and can create tax issues).
Indemnification: Some clients request this, especially larger companies. I'll include: "Each party agrees to indemnify the other against claims arising from their own negligence or misconduct." This is mutual and reasonable. What I push back on is one-sided indemnification where you're liable for everything and they're liable for nothing.
Warranty Disclaimer: For technical work, I add: "Contractor warrants that services will be performed in a professional manner consistent with industry standards. Contractor makes no other warranties, express or implied." This protects you from unrealistic expectations while still committing to quality work.
How to Actually Use This Sample Freelance Contract
Here's my exact process:
Step 1: After the sales call, I send a proposal outlining deliverables and pricing. This isn't the contract yet.
Step 2: Once they agree verbally, I draft the contract using the structure above. I customize the scope section for their specific project, but everything else stays identical across clients.
Step 3: I send it as a PDF with a DocuSign link or similar e-signature tool. I don't use complicated contract management software. DocuSign's free tier works fine.
Step 4: I don't start any work until the contract is signed AND the first payment clears. No exceptions. I've been burned exactly once by starting work on a handshake, and that was enough.
If you want a ready-to-use template you can customize immediately, grab my one-page contract template. It includes the exact language I use, formatted for easy editing.
I keep all signed contracts in a dedicated Google Drive folder organized by client name and date. I also keep a spreadsheet tracking contract dates, payment schedules, and renewal dates for ongoing clients. This takes five minutes per contract but has saved me multiple times when clients claimed they "never agreed to that."
When This Sample Contract Isn't Enough
This structure works for 90% of freelance projects. Here's when you need something more substantial:
Projects over $50K: At this level, clients usually have their own paper. Let them send their contract first, then redline the payment terms and scope to match your requirements. Don't fight their legal department on IP clauses or jurisdiction language. Fight on payment timing and kill fees.
Government or enterprise clients: They'll require their own vendor agreements. Review their paper for payment terms (Net 60? Net 90?) and make sure the scope is airtight. Everything else is usually non-negotiable.
Ongoing retainers: Add an auto-renewal clause with 30-day cancellation notice. This prevents clients from ghosting without proper notice.
International clients: Consider adding a jurisdiction clause specifying which country's laws govern the contract. I typically use: "This Agreement shall be governed by the laws of [YOUR STATE/COUNTRY]." This matters if you need to enforce the contract later.
For more complex agreements, check out my full guide on how to write a contract that covers negotiations and redlining client paper.
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Try the Lead Database →The Biggest Mistake I See Freelancers Make
They spend weeks negotiating contract terms with a prospect who hasn't even confirmed budget. Here's the truth: if a client is willing to pay your rate and you've clearly defined scope, the contract is a formality. They'll sign whatever reasonable agreement you put in front of them.
If a client is nickeling and diming contract language, it's usually because they're not sold on the project itself. That's a sales problem, not a legal problem. Go back to the value conversation before you waste time on contract revisions.
I also see freelancers using AI to generate contracts. If you go this route, use something purpose-built like Proposal AI that understands client services context. Don't just dump prompts into ChatGPT and hope for the best.
Another common mistake: sending contracts too early. I used to send the contract with the initial proposal. This scared off prospects who weren't ready to commit yet. Now I send proposals first, get verbal agreement, then send the contract. This increased my close rate by roughly 30% because prospects could say yes to the project before dealing with legal paperwork.
Sample Contract Language for Common Scenarios
Handling Revisions
Include this in your scope section: "Client is entitled to [NUMBER] rounds of revisions. Additional revision rounds will be billed at $[RATE]/hour." I typically allow two rounds. It's enough for legitimate feedback, but not enough for endless tweaking.
I also specify what counts as a revision: "A revision round includes feedback on all deliverables provided at once. Piecemeal feedback submitted over multiple days counts as multiple revision rounds." This prevents clients from submitting feedback one item at a time to game the system.
Rush Fees
If clients want faster turnaround, charge for it: "Standard turnaround time is [TIMEFRAME]. Expedited delivery (less than [TIMEFRAME]) incurs a 50% rush fee."
I've had clients agree to rush fees then complain when invoiced. Now I require rush fees to be paid upfront along with the initial deposit. The clause reads: "Rush fees are due before expedited work begins."
Expenses
For projects with stock photos, paid tools, or travel: "Client agrees to reimburse Contractor for pre-approved expenses within [NUMBER] days of receipt of expense report. Expenses over $[AMOUNT] require written approval before incurring."
I always get expense approval via email before purchasing anything. Then I include that email when submitting the expense report. This prevents any "we never approved that" disputes.
Subcontractors
If you might need to hire subcontractors, include: "Contractor may engage subcontractors to fulfill obligations under this Agreement. Contractor remains responsible for all work quality and deliverables."
This gives you flexibility to scale without getting client approval for every subcontractor. Just make sure your subcontractors sign their own agreements with you that mirror your client obligations.
Why I Don't Use Complicated Contract Software
I've tried most of the contract management platforms. They're overkill for freelance work. Here's what I actually use:
- Google Docs: For drafting. I have a template saved that I copy for each new client.
- DocuSign or PandaDoc free tier: For e-signatures. Both work fine.
- PDF export: I save a signed PDF to a client folder in Google Drive.
That's the entire system. It takes 10 minutes per contract. If you're spending more time than that on contract admin, you're overthinking it.
For managing the actual client relationship after contract signing, I use Close as my CRM. It keeps all contract details, payment schedules, and communication in one place. But that's a post-signature tool, not part of the contracting process itself.
I also keep a simple spreadsheet tracking key contract dates: signature date, payment due dates, project completion date, and any auto-renewal dates. I review this spreadsheet every Monday so I never miss a payment follow-up or deadline.
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Access Now →What to Do When Clients Won't Sign
Some clients will push back on signing any contract. Here's my rule: no contract, no work. Zero exceptions.
If they say "we have a purchase order system instead," fine. Get the PO in writing with scope and payment terms clearly stated. That's functionally equivalent to a contract.
If they say "let's just do a handshake deal," that's a red flag. Legitimate businesses sign contracts. If they won't put payment terms in writing, they're not planning to pay on time (or at all).
The only exception: if you're doing a paid test project under $1,000 for a large company to prove capabilities before a bigger engagement. In that case, email confirmation of scope and payment is sufficient. But anything over a grand requires proper documentation.
I've had clients say "we need our legal team to review this." That's fine, but set a deadline. I respond: "Great, I'll need the signed contract back by [DATE] to hold your spot in my schedule. After that date, I may need to push your start date back." This creates urgency without being pushy.
How to Handle Contract Negotiations
Most clients won't negotiate your freelance contract if it's reasonable. But occasionally you'll encounter pushback. Here's how I handle common negotiation points:
Payment terms: This is the most common negotiation. Clients want Net 30 or Net 60, you want immediate payment. My compromise: I'll accept Net 15 for established companies with good references, but the upfront deposit is still due immediately. The deposit timeline is non-negotiable.
Liability caps: Sometimes clients want unlimited liability. I push back hard on this. My response: "I'm happy to carry professional liability insurance up to $[AMOUNT], but I can't accept unlimited liability on a $[PROJECT AMOUNT] project. If you need higher coverage, I can get additional insurance, but it'll need to be added to the project cost."
IP ownership timing: Some clients want to own IP immediately, even before final payment. I counter with: "I'll transfer IP upon substantial completion and receipt of 90% of project fees. The final 10% can be paid after IP transfer." This protects both parties.
Non-competes: I reject these outright for freelance work. My response: "I don't sign non-competes as a freelancer because I need to maintain the ability to serve multiple clients. If you need exclusive services, we can discuss a full-time arrangement at a different rate structure."
The key to contract negotiation is knowing which points matter and which don't. Payment terms and scope definitions matter. Boilerplate legal language usually doesn't. Pick your battles.
What Freelance Contracts Should Include for Specific Industries
Different types of freelance work need specific contract provisions. Here's what I add for common freelance categories:
Web Development: Include hosting and maintenance terms. Specify: "Contractor will deliver source code and deployment instructions. Ongoing hosting, security updates, and maintenance are not included unless specified in a separate maintenance agreement." Also include browser compatibility requirements and testing procedures.
Content Writing: Specify research expectations, revision process, and usage rights. I include: "Client may use delivered content for [SPECIFIED PURPOSES]. Contractor retains the right to use writing samples for portfolio purposes with client's identifying information removed."
Graphic Design: Define file formats, color spaces (RGB vs CMYK), and whether you're providing print-ready files or screen-only files. Also specify font licensing: "Client is responsible for purchasing any commercial font licenses required for final use."
Photography: Include usage rights, delivery timeline, and what happens to raw files. I always specify: "Contractor retains raw files. Client receives edited JPG files optimized for [SPECIFIED USE]. Additional file formats available for $[AMOUNT]."
Consulting: Define deliverables clearly. Instead of "consulting services," specify: "Contractor will deliver [NUMBER] hours of consulting via video call, plus a written report summarizing recommendations." Vague consulting agreements lead to scope creep faster than any other freelance work.
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Try the Lead Database →How to Find Clients Who Actually Sign Contracts
The quality of your clients determines how smooth your contracting process goes. Here's where I find clients who respect contracts and pay on time:
I build lead lists using this lead database filtered for companies with 10-500 employees. Companies this size are professional enough to have proper processes but small enough to move quickly on hiring freelancers.
For local service businesses (like if you're doing marketing for restaurants or contractors), a Maps scraper helps build targeted lists of prospects in specific industries and locations.
Once you have leads, you need their contact information. I use an email lookup tool to find decision-maker emails, then reach out with a specific offer.
The companies most likely to sign freelance contracts quickly: established businesses that have hired freelancers before, companies currently hiring for roles you can fill as a contractor, and businesses in industries with established freelance markets (tech, marketing, creative services).
Avoid: brand new startups (they won't have budget allocated properly), companies that want "trial projects" without payment, and anyone who asks you to start work before discussing terms.
State-Specific Contract Considerations
Freelance contract requirements vary by location. While I'm not a lawyer and this isn't legal advice, here are practical considerations I've learned:
California: California has strict independent contractor classification rules. Make sure your contract emphasizes that you control how and when work is completed. Avoid language that makes you sound like an employee (set hours, supervision, company equipment).
New York: New York requires freelancers to have written contracts for projects over $800 under the Freelance Isn't Free Act. If your client is in NYC, use a written contract for anything above this threshold.
International clients: For clients outside your country, specify which jurisdiction's laws apply. I use my home state's laws for all contracts regardless of client location. Also address currency, payment methods, and VAT/tax handling if applicable.
When in doubt, consult with a lawyer in your state who specializes in contract law. I spent $400 having a lawyer review my contract template once. That review has saved me thousands in potential disputes.
Download the Template and Get Started
You now have the exact structure I use for freelance contracts across all my businesses. The key is keeping it simple enough that clients actually sign, but specific enough to protect you when things go sideways.
Grab my agency contract template for a ready-to-use version you can customize in under 10 minutes. It includes all the language above formatted for immediate use.
And if you're struggling with the bigger picture of running a freelance business or agency - pricing, sales, client management - that's what we work on inside Galadon Gold.
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